Considerations When Contracting for Recycling Services
An ideal recycling contract for an office or facility will be determined primarily by the amount of waste that is generated and what kinds of recyclables are predominant in the waste stream. For instance, a road department maintenance yard will likely generate a large quantity of scrap metal. A field office may generate mostly paper, but also some beverage containers. Facilities that generate significant quantities of valuable materials, such as metals or high-quality white paper, may earn money by contracting for the recycling of those materials separately. For many other offices and facilities, negotiating with a waste hauler for comprehensive recycling services along with their waste services may be the simplest and the most cost-effective option.
For more than 20 years, CalRecycle has administered three recycling contracts for the collection of certain recyclables materials (scrap metal and paper recycling) for state departments in certain geographic areas. In July 2017, the Legislature changed Public Contract Code Sections 12165 – 12167.1. As a result of these changes state agencies can do the following:
- Recycling Contracts: State Agencies have the ability to contract for recycling services without seeking prior approval from CalRecycle.
- Recycling Revenues: State Agencies have the ability to retain all revenues generated by recycling activities for reinvestment into recycling and composting programs.
To allow State agencies to exercise the flexibility and authority afforded by the recent statutory changes, the remaining CalRecycle managed contracts will end on the expiration dates and will not be renewed by CalRecycle (see three contracts link above) so State agencies can enter into their own contracts. Notification of affected State agencies is underway, and these agencies will need to arrange for new recycling services to start the day after the contract expiration.
Examples of recycling contracts negotiated by State agencies are available at the bottom of this webpage.
Key Steps in Managing Waste at State Facilities:
Identify the Recycling Coordinator and Building Manager
Each State agency is required to appoint a recycling coordinator. The recycling coordinator may be responsible for a single building or for multiple facilities and be knowledgeable about solid waste management and recycling options at their agency’s locations, The recycling coordinator is typically responsible for filing the agency’s annual report with CalRecycle and for calculating the agency’s per-capita disposal rate. CalRecycle advises facility managers to contact their agency’s administrative offices to identify their agency’s Recycling Coordinator. If your agency is located within a larger building with multiple businesses, contact the building manager to review current recycling activities, existing recycling contracts and opportunities to improve.
Additionally, CalRecycle’s Local Assistance and Market Development Branch has staff assigned to each agency. These CalRecycle staff can assist with various recycling and composting options and resources. For instance, food waste makes up a large portion of the waste stream, but not all jurisdictions have convenient options to compost or anaerobically digest food waste. If your facility has a large landscaped property, you may be able to separately contract for landscaping materials to be composted, greatly reducing the volume of your waste. If your landscaped property is small, you may be able to compost landscape materials and even some food scraps on site using a within-vessel compost system (41).
For more information, see the website titled Waste Management for State Agencies.
Conduct a Waste Audit
A waste audit identifies the amounts and types of recyclable materials and waste a facility generates. Using the data collected during a waste audit, a State Agency can identify ways to reduce waste and enhance its recycling efforts, and determine potential cost savings by avoiding disposal. A waste audit involves sorting and weighing what is disposed by your facility. Guides to performing waste audits are readily available on the web. The guide offered by the Natural Resources Defense Council is typical and concise.
Develop a Refuse and Recycling Plan
After determining the amounts and types of recyclables a facility generates, the next step is to develop a refuse and recycling plan for approval by management. This plan will determine how the recyclables will flow from the collection point to the loading dock.
Management should be included in all steps of the plan development. The potential for success is greater when management supports the plan.
Concepts that may help generate management support include:
- Reduced disposal costs
- Potential for income from well-sorted recyclables
- Compliance with California’s State Agency Waste Management Requirements
- Nurturing of an ecologically aware culture
The amount of space available at a facility for storing and collecting recyclables will determine the frequency of pickups and the types of materials that can be collected and stored. Other recycling plan considerations may include:
- Number/size and signage of recycling bins
- Gaining/maintaining employee support
- Continuous education of employees to reduce contamination and ensure optimal material sorting
- Movement of materials from bins to loading docks, and by whom
- Available storage space at loading docks or nearby
- Multiple tenants and shared recycling duties
- Maintenance and cleaning schedule for bins
- Potential need to store valuable recyclables in theft-proof containers
- Need to protect some commodities, like high-quality paper, from moisture
- Heavy equipment access for unloading and loading operations
- Point of contact for hauler or recycler
- Recycler security clearances
Review the Current Waste Hauler Agreement
If the current waste removal contract is based on the frequency of service or the amount of waste generated, rather than a flat fee, waste prevention and recycling may be financially rewarding. Facilities can reduce disposal costs and sometimes earn revenue from the sale of separated recyclables. Due to new laws such as mandatory commercial recycling, the current hauler could be willing and ready to provide an additional bin for mixed recyclables at little or no cost.
Consider Other Potential Recyclers
Private entities may offer opportunities that could benefit a facility. For instance, local non-profit agencies may offer low-cost recycling pickup or an opportunity to donate recyclables to a cause that benefits the community. These types of organizations may also provide recycling containers, remove pallets, shred confidential documents, and provide promotional materials to educate employees.
Issues to consider when choosing a vendor include:
- Whether materials must be separated,
- Whether the vendor will pay for recyclables, how the materials will be weighed, and how payments will be calculated and tracked,
- Whether the vendor can provide references
Consider Commingled Recyclables vs. Source Separation
Commingling means combining all types of recyclables, like paper, plastic, glass and metal together. Source separation involves separating material into types, such as paper and plastic.
Many waste service providers offer commingled recycling: one bin for all recyclables and a separate bin for waste. This “single stream” of materials is transported to a materials recovery facility (MRF) where it is sorted by material type and baled for sale to brokers.
If you are seeking revenue from recycled materials, source separation may be a better choice. In general, better sorted material is worth more; for instance, source separated white office paper is worth more than mixed paper. Source separation requires multiple bins, so consider whether additional bins will fit in the space available.
Educate Employees About Contamination
Many contracts allow recyclers to pay less or charge fees for rejected or contaminated loads. Even with commingled recyclables, the presence of garbage in the recyclables can cause hardship for the recycler or hauler. Ongoing employee education programs reduce the incidence of contamination. Each contract will need a predetermined process for handling loads that are too contaminated for recycling, with clearly defined steps for documenting rejected loads.
Track and Manage Revenue
Not all recycling activities generate revenue. In some cases, the revenue can offset the cost for waste removal or even support other recycling activities. In many other cases, the waste service provider will agree to take the recyclables for no extra charge, and disposal costs will decline as the volume of garbage decreases.
For larger Agencies or facilities with potentially valuable waste streams, however, the revenue could be substantial. For any state facility planning to receive recycling revenue, the department’s accounting office should consider the appropriate method to deposit and track the proceeds.
There is more than one way to structure a revenue contract, but all such contracts should have certain features to ensure accountability. First of all, the contract should require the recycler to provide weight tickets for each load of materials removed from the State facility. The weight tickets should be generated by a scale operated by a certified weighmaster. Second, the price paid for the material needs to be associated with a published market; this requires a method to track your specific commodity type. There are several trade publications for pricing recycled commodities, but these subscriptions can be expensive. Free recycled commodity pricing is not generally available on the Internet; however, you may be able to contact local recyclers or brokers to obtain information about current prices.
CalRecycle’s paper recycling contract for Sacramento area State offices, and its metal recycling contracts for Caltrans, are good examples of revenue-producing contracts. Here are some notable features of these contracts:
- In the paper contract, commodity types are tied to a floor value based on the three-year average price for that commodity. This protects the State from lapses in service when commodity prices are low, and allows both parties to share the profits when prices are high.
- In the metals contract, prices for a mixed load of metal are tied to one material type pricing, such as: #2 bundles of ferrous metal. That prevents State employees from having to sort many different metal types, which requires considerable expertise. It also greatly reduces the paperwork associated with tracking revenues.
Examples of State Agency Recycling Contracts
A. Sample Paper, Cardboard and Beverage Container Recycling Contracts
B. Other Sample Contracts:
NOTE: These sample contact pages are intended to provide general information and point out issues to consider regarding recycling services contracts. They are not intended as a substitute for legal advice, and should be used only in conjunction with the advice of an attorney.